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Millions in drug company and pharmacy settlements continue to flow to Utah • Utah News Dispatch

Utah will continue to see multi-million dollar settlements with drug companies stemming from large federal lawsuits over the opioid crisis and manipulation of generic prescription drug prices.

On Monday, the Utah Attorney General's Office announced a $1.37 billion settlement with grocery chain Kroger, which was the state's largest pharmacy buyer and distributor of opioids between 2006 and 2014 under the name Smith's Food and Drug, according to federal court filings .

That settlement, announced by a group of 30 bipartisan attorneys general, will bring Utah about $45 million. State law requires opioid agreements to go toward drug treatment, harm reduction, public health campaigns, or other “opioid control” programs. These payments will begin next year.

And last week, on October 31, the Attorney General's Office announced another settlement between 50 states and territories and drugmakers Heritage Pharmaceuticals and Apotex. According to a complaint filed in federal court, the companies allegedly engaged in “one of the most egregious and damaging price fixing schemes in the history of the United States.”

These settlements – an initial $10 million from Heritage and an outstanding $39.1 million from Apotex – are intended to compensate people who purchased generic prescription drugs from either company between 2010 and 2016.

Kroger is paying Utah millions for drug rehabilitation and public health

According to court documents, Kroger purchased more than 140 million units of oxycodone and hydrocodone between 2006 and 2014, more than any other pharmacy in Utah – the Utah Attorney General's Office said in a statement that the company was responsible for about 15% of the state's pharmacy quantity of these both medications.

In a statement, the office highlighted Price, Utah, a community in Carbon County with about 8,000 residents. There, a Kroger store purchased enough oxycodone and hydrocodone over a seven-year period to supply every person in the city with 71 pills, according to the attorney general's office.

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In addition, state prosecutors say Kroger instituted policies to give pharmacists bonuses based on the number of prescriptions they filled.

The Kroger announcement brings Utah's total amount of relief funds related to the opioid crisis to more than $500 million, with the majority of that coming from pharmacies, drug manufacturers and marketing agencies.

“These dollars will help free many people trapped in the cycle of addiction and prevent another generation of Utahns from ever becoming addicted to opioids in the first place,” Utah Attorney General Sean Reyes said in a statement.

A “culture of collusion” among drug manufacturers

The settlements with Heritage and Apotex are part of an ongoing legal battle led by Connecticut Attorney General William Tong against dozens of corporate defendants and company executives over what prosecutors described as a conspiracy to unlawfully hinder competition by increasing prices increase and enforce “a deeply rooted culture of collusion.”

“The participants met at industry dinners, girls' nights, luncheons, cocktail parties and golf outings and communicated through frequent phone calls, emails and text messages that laid the foundation for their illegal agreements,” a news release from the Utah Attorney General's Office reads.

The litigation first began in 2016 and targeted Heritage and 17 other companies for their roles in the manufacture and sale of 15 generic drugs, as well as Jeffery Glazer and Jason Malek, two former Heritage executives who later reached settlement agreements.

In 2019, another complaint was filed against Teva Pharmaceuticals and 19 of the county's largest generic drug manufacturers. And a third, more recent lawsuit names 80 generic drugs that “represent billions of dollars in sales” in the U.S., according to the attorney general's office, naming 26 corporate defendants and 10 individual defendants.

“The overwhelming evidence of illegal practices is based on databases containing over 20 million documents, millions of call records and contact information for over 600 sales and pricing representatives in the generic drug industry,” Reyes said. “The settlement with just two of these manufacturers returns nearly $50 million to individuals who overpaid and calls for internal changes to prevent future unfair competition and price gouging.”

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